Why the Notion of the IT Organization is Deeply Flawed!

Posted on May 4, 2009 by itorganization2017

broken1It’s time to fully acknowledge what I first recognized back in 1980 when I read Alvin Toffler’s remarkable book, The Third Wave.  In that book, Toffler pointed out that the differentiation of production and consumption is not the natural order of things.  Separation of production from consumption was necessary to fuel the industrial age (which Toffler called the Second Wave).  Before that, human beings (as individuals, families and small communities) produced what they needed to consume.  With the industrial revolution, there was a “breach,” as Toffler referred to it, between production and consumption, that was “an unnatural act” and that would be healed over time by technology.  Fast forward 30 years to the age of mass collaboration, mass customization, crowdsourcing, open source and Wikinomics, and Toffler’s words ring true to a degree unimaginable back then!

The Separation of IT Production and Consumption is an Unnatural Act!

Back in 1980, as I read The Third Wave (and coincidentally was personally transitioning from managing a software company to management consulting – helping IT organizations increase their effectiveness) it occurred to me that the need for an IT organization represented an unnatural separation of IT consumption from production.  I came to realize that the whole notion of the IT organization, especially as it was typically configured back then, was essentially a temporary phenomenon.  It’s also worth noting the IT context around 1980.  Apple had introduced the Apple II in 1977 and IBM legitimized personal computing as an enterprise capability with its introduction of the IBM PC in 1981.  Suddenly, Toffler’s words as they applied to enterprise IT were looking prophetic!

So, nearly 30 years later, having conducted literally dozens of global multi-company research projects into various facets of IT effectiveness, and worked with hundreds of IT organizations over much of the world, I am more convinced than ever that no IT organization is “good enough” for the institutions that they support to fully leverage the incredible emerging power of the Internet 2.0 (let alone 3.0!)

Why Web 2.0 Will Render Today’s IT Organization Obsolete

I see at least two major reasons that today’s IT organization will become obsolete over the next dozen years or so.

  1. Just as the PC democratized computing, if only in a relatively small way, Web 2.0 is revolutionalizing it in a massive and far reaching way.  The PC moved computing from the mainframe “glasshouse” to the desktop, and ultimately laptop.  Web 2.0 is moving computing (and nearly all the associated software needed to “compute”) from the desktop/laptop to the “cloud”.  When the PC first appeared, even a modest tool such as Visicalc had “end users” doing things with computers that would have taken some pretty heavy duty Fortran programmers to achieve.  Today, “end users” are doing things with mashups and widgets that would have taken some pretty heavy duty web programmers to achieve just a couple of years ago!
  2. IT professionals, and the organizations they staff are not just providers of IT products and services – they are also consumers.  As such, they too will benefit from Web 2.0 (although as I’ve pointed out before, they may not be the first to the party!)  The types of collaborative capabilities needed by the enterprise today also lend themselves to (and perhaps mandate?) collaborative approaches to IT management.  Think of it this way, virtually everyone will be a “programmer”, system administrators will be everywhere, and technical specialists will be ubiquitous.

And the Walls Came Tumbling Down!

I realize that I am taking an extreme position – that the reality will be somewhat less severe for most of us.  But I also see great potential to remedy some of the shortcomings of the typical IT organization:

  1. Business-IT alignment has been a perennial top challenge for years!  Always showing up at or near the top of “biggest issues” in the annual computer magazine and research surveys, having an IT organization that translates business requirements into IT specifications and solutions is always, at best, a flawed approach.  If I need a translator, something will get lost in the translation.  Also, how can I tell you what I want, when I don’t know what I want till I see it!  Give me the tools, let me explore and play, and I’ll figure out what I want, and in so doing, satisfy the need!
  2. There’s always an element of “the IT organization adds cost but not value” – this is just inherent of the role of intermediaries.  The Internet has disintermediated many types of services – increasing pricing transparency and eliminating (or at least reducing) supply/demand asymmetries.  The Internet has also led to new forms of intermediation (aggregators, brokers, agents) but these are not of the same type as those that were disintermidiated.

From Fishing for them to Teaching them to Fish

So, there will be new and different roles to play for the IT professional – but I emphasize DIFFERENT!  Today’s IT organization has to carefully rethink the IT capabilities needed by the enterprise it serves, and how best to satisfy those capabilities – but not just from within the IT organization.  We have to consider an entire ecosystem including the business user as producer, external entities as producers and consumers, and new internal roles of “brokers,” “guides,” and “information assistants”.  I don’t know what all the roles are, what they will be called, where they will all work, what competencies they need, or how they will be sourced and trained.  But I do believe they will not be configured in anything like today’s typical IT organization – dozens, or hundreds, or in some cases, thousands of IT professionals, “doing IT stuff for the business.”  We have to shift our emphasis from fishing for the massess to “teaching them to fish” and providing them with the fishing rods and well stocked lakes for them to fish in.

How do you see this playing out?  Back to the title of my blog, what will the IT organization look like circa 2017?

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IT Management Lessons from Scuba Diving

Posted on April 30, 2009 by itorganization2017

scuba-diving-introductionI note in my About page that “from time to time I will digress to my hobby passions because I sometimes find interesting connections or insights from them.”  Well, perhaps its an excuse to indulge a hobby through this blog, but one of those “time’s” has come as I’m on a scuba vacation with plenty of scuba to enjoy, and many relaxing moments to reflect on the hobby, sport and business of scuba diving.

Sensible, Collaboratively-Developed Standards

Scuba diving is fairly well regulated on a global basis and maintains an excellent safety record for recreational divers.  The process entails multiple levels of certification, with each level requiring behaviors that demonstrate that the key skills have been learned.  While there are always rogue operators who will rent anyone a tank of compressed air, and clearly bozos who will use them and dive untrained and uncertified, most recreational divers will pick a licensed dive operator who will insist on seeing and take note of your diver certification before they will rent you an air tank or take you to a dive site.

There is a powerful collaboration between the retail dive shop operators, training operators, dive boat and the equipment manufacturers and with the independent scuba certification agencies.  These agencies provide all levels of diver training, regulate and represent diving professionals such as divemasters and dive instructors, regulate dive operators, participate in research in dive medicine, promote marine conservation, and market diving as a sport.  The largest global agencies are The Professional Association of Diving Instructors (PADI) and the National Association of Underwater Instructors (NAUI).

Lessons for IT Management

Now think about what this in the context of the IT profession:

  • Scuba diving has global standards, including the required competencies for open water diving, advanced diving, rescue diving, dive instructor, and so on.  In order to be certified, you must go through standardized training and demonstrate you understand and have acquired the skills.  The IT profession does not (though there are respected certifications for domains such as project management.)
  • A diver wishing to rent a tank of air, and/or get a guided dive,  has to show a valid dive certificate to prove they’ve reached a minimum level of competence and safety.  Furthermore, (though this is not enforced) they can ask to see the diver’s log book to see their diving record, including total number of dives, date of last dive, and the kinds of conditions they’ve dived in.  In the IT recruitment process, this is not the case.  We have to judge competence largely by a resume, which often have limited value.  Have you ever seen a resume that said the individual was incompetent at anything?
  • Scuba diving has a globally standardized competency model, and associated competency development resources (training, on-line lessons, tutorials, etc.)  What are the global standards for roles such as “business analyst”?  Where are the standardized competency models and certification programs for different roles in the IT profession?  Yes, I know that some certifications do exist, but they are not globally regulated or standardized.  For example, I have  worked with hundreds of people with business analyst titles over the years, and their actual business analysis knowledge and competencies have varied widely.
  • There is substantial science behind scuba diving.  In the early 1900’s, studies began to establish the relationship between dive depth and bottom time, and how to avoid the painful and potentially life-threatening decompression sickness (the bends). This research, refined by the US Navy, led to dive tables, one of the fundamental skills for Scuba certification.  IT geeks note, dive computers are available and reasonably inexpensive nowadays to monitor each dive on a continuous basis to figure out the state of dissolved nitrogen in your tissues – the source of the Bends.  The dive computer shows precisely how much time the diver can safely remain in the water, or how long they have to stay on the surface before the next dive.  This is more accurate and much easier than calculating the results using a dive table.  By contrast, tasks such as estimating a solutions delivery project, especially if software development is part of the solution, are typically more the result of rough rules of thumb or often guesswork than any real science!  Many IT projects get the equivalent of the bends, and some suffer life threatening consequences!
  • But I think that the biggest insight is that all this regulatory activity, training, and recreational diving takes place on a global scale with minimal fuss and bother.  Why is this?  Divers a passionate about scuba diving!  How can you create jobs for people that foster in them the passion they feel about their favorite hobby or sport?
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Is Your IT Organization an Enabler? Or a Preventer?

Posted on April 16, 2009 by itorganization2017

road_block1A really short post today (could have been a Tweet if I were so inclined!)  I got a great comment from a CIO client to my post yesterday on the ROI of Enterprise 2.0.  He said,

One of Dion Hincliffe’s lines definitely hits home for me… “In the end, all one can actually do predictably is enable the possibilities and not prevent them.”   We have said to each other that a lot of this is about making sure we’re seen as the Enabling Department, rather than the Prevention Department.

When Web 2.0 has significantly impacted your company (you either stole a march on your competitors, or they did on you!) will your business partners look back and say,

“IT really inspired us, showed us the way, and enabled us to take advantage of Web 2.0.”

Or, will they be saying (or, at least, thinking),

“Just like the Internet revolution and the Personal Computer revolution, IT was asleep at the switch yet again!  They didn’t see it coming ’till it was too late, and then they put roadblock after roadblock in our way!”

How are you creating a legacy of enablement and innovation?  What more could you be doing?

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Don’t Look for ROI on Enterprise 2.0 – Look for Value!

Posted on April 15, 2009 by itorganization2017

roi

Dion Hinchcliffe had a superb post on Determining the ROI of Enterprise 2.0.  The post cites several authoritative and useful sources on the subject.  It also hypothesizes several reasons for the mostly “wait and see” attitude currently taken by most IT leaders and business managers.

But I mainly want to focus on the business case for Enterprise 2.0 – specifically, the pursuit of Return on Investment – ROI.

The Problem with ROI

Much has been said in the past about the limitations and challenges with ROI as a tool to evaluate many types of IT investments.  Dion’s post links back to an old post, The Case Against the Business Case by the father of the term Enterprise 2.0, Andrew McAfee.  McAfee in turn references the work of Kaplan and Norton and their Strategy Mapping book which points out that the value of intangible assets (human, organizational, and information capital such as databases, information systems, networks, and technology infrastructure):

…derives from their ability to help the organization implement its strategy… Intangible assets such as knowledge and technology seldom have a direct impact on financial outcomes such as increased revenues, lowered costs, and higher profits. Improvements in intangible assets affect financial outcomes through chains of cause-and-effect relationships.”

This is a really important point, but it sets up a very slippery slope. “We can’t attribute any direct financial impact to our Enterprise 2.0 investments…  so we won’t try.”  It’s the “not trying” here that drives me nuts!  It leads to:

  1. Lazy thinking… which leads to…
  2. Lack of clarity about what outcomes we are trying to drive to with our Enterprise 2.0 initiative… which leads to…
  3. Lack of rigor in thinking through what behaviors we are hoping will change in order to realize the targeted outcomes…  which leads to…
  4. A “if we build it, they will come” approach to Enterprise 2.0…  which leads to…
  5. Failure of the Enterprise 2.0 initiative, “proving” there is no business case!

Value from Enterprise 2.0 can be a Self-Fulfilling Prophecy

Last August I wrote a post titled Measuring the Business Value of IT – Where You Can Win By Simply Trying! My point here was that the discipline of thinking through what we’d like to achieve, and how we might achieve it, dramatically increases our probability of achieving it.  As a trivial case, imagine the following conversation:

Let’s invest $1 Million to increase collaboration across our company.”

“Why?”

“Because we’ll be more innovative and productive.”

“How?”

“Hmmm – good question!  Well, we’ll tap into people’s ideas about how to improve our products and services.  And even how to improve our processes.  We could even tap our customers’ ideas!”

“How will we do that?  What will we need to enable that?  What will we need to shift to those kinds of behaviors?  Are there any aspects of our culture that might inhibit those things happening?”

“Hmmm!  More good questions.  Perhaps we need a bit more definition around what we are trying to do?  Perhaps we need to drive to some clarity on the outcomes we hope to achieve?  Perhaps we need to assess our ability to achieve those outcomes and clarify what will need to change for them to materialize?”

And so on.  Note, we aren’t building a business case in the financial sense.  This is not an ROI exercise – its a business value and outcomes exercise.  And this is the type of analysis that needs to be done to shift from the laissez faire “if we build it” to a more thoughtful, targeted approach.

(Image courtesy of SponsorMap)

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Best Buy and Web 2.0

Posted on April 14, 2009 by itorganization2017

bestbuyI’ve posted quite a few times on Web 2.0 capabilities as a way to drive new energy, and even innovation, into an IT organization and the company it serves.

The Wikinomics blog (full disclosure – this is affiliated with nGenera Corporation, the company I am with) just posted a very nice piece on how Best Buy is using Web 2.0. The piece features a great little YouTube video – well worth the 4.33 minutes it takes to watch.  (Look for some quick clips of Don Tapscott, Chairman of the nGenera Innovation Network.)

Your IT Organization as a “Geek Squad”?

As you check this out, think about Best Buy’s “Geek Squad” – how could this use of Web 2.0 play out for your company, and how might you position your IT organization as your company’s “Geek Squad”?

Of course, a few years back, no self-respecting CIO would want to think of his or her organization as their “geek squad” but I think Best Buy has successfully legitimized the term.  Their Geek Squad (a Best Buy subsidiary and a registered trademark/protected brand) has been a valuable differentiator for Best Buy – by and large enhancing the shopping experience, adding value to the store’s capabilities, and helping consumers install and use many of the products that Best Buy sells.

Are your IT staff seen this way?  Are they a differentiator and a value add?  Do they enhance the value of IT’s products and services?

Your Web 2.0 Experience

How does the social networking experience in your company match up against the Best Buy experience?  How could you get closer to the benefits Best Buy is touting in this video clip?

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Supposing You Funded IT Like a Charitable Donation?

Posted on April 13, 2009 by itorganization2017

charity_box1I’ve had this IT funding fantasy for years (I know, it’s really sad that my more exciting fantasies are to do with IT funding scenarios!) Supposing the CIO had to do a fund drive every year or every six months the way our local National Public Radio stations had to operate in order to fund certain IT activities?

I actually hate the NPR fund drives, but I love what privately funded radio brings compared to all other forms of news and quality radio programming  in the USA, and I realize that the funding model is necessary and ultimately important to the NPR mission.

Listening to my local radio station’s NPR funding appeal for a couple of weeks twice a year always gets me thinking about IT funding and my “IT Charitable Donation Fantasy.”  I’m not suggesting this is the way to fund all IT activities – far from it.  I believe that funding, for good or bad, drives behavior, so if we want responsible business behavior around IT assets and activities, we need to think through the desired behaviors and how funding models promote or detract from those behaviors.

Three Distinct IT Funding Pools

It is useful to carve IT spending into 3 broad categories:

  1. IT infrastructure.  This should be defined very broadly to include all shared IT capability.  To borrow from Prof. Peter Weill’s definition, IT infrastructure is the base foundation of IT capability budgeted for, centrally coordinated and shared across the enterprise.  I don’t see this being funded through a charity-like, voluntary basis.  Like all infrastructures, nobody really wants to fund it, and few understand the technology details, risk management, capacity planning and other implications that render IT infrastructure either reliable and supportive of the business mission on the one hand,  or unstable and get in the way of the business mission on the other.  I think IT infrastructure is best funded as a kind of tax – in a way that fairly represents the proportional value to the organization that uses it.  Depending upon the nature of the business, this might be a function of headcount, divisional revenue, or some other factor.  And, as an aside, the CIO should be looking to continuously improve the cost per unit of infrastructure over time.
  2. Business Solutions.  These should essentially be funded by the business units that require them and will benefit  from them.  If more than one business unit, then the combination of business units will fund the solution in proportion to the degree of benefit or value each derives.  This will never be pure science and will typically involve some kind of negotiation between the parties.  By the way, this type of activity should have a robust value realization approach to go along with the funding.  (I’ve posted on value realization quite a bit in the past – if you are not familiar with this material, please either search my blog for “value realization” or drop me a line, and I’ll send you the links.)
  3. Innovation/Research and Development.  This is the part of the IT budget that I think lends itself best to a voluntary funding model.  The most common funding practice I come across for this category of activity is “stealth funding” – i.e., the CIO squirrels away funds from other activities, and runs them below the radar – some unspent training dollars here; some savings from a renegotiated vendor contract there; some money left over from a project that came in under budgets, and so on.  The problem with stealth funding is that it is unpredictable, and it hides from the customer base the fact that money for innovation and R&D is actually necessary, and a sign of a healthy IT organization.

Fund Raising for IT R&D

So, how might this work?  First, the CIO needs to decide a funding target for IT Innovation and R&D.  This might be something between 1% and 5%.  Then build a business case – how will the funds be used?  Why should the business care – how might they benefit?  Typically, these funds will be invested in a mini-portfolio of activities, from low-risk to high-risk, and from short-term to long-term.  Will there be an expected payback on the whole portfolio?

For those business heads that chose to participate, will they get any special treatment compared with those who chose not to participate?  (This is a thorny question!  NPR does not threaten to cut me off listening to the wonderful Morning Edition or All Things Considered, or any of their great weekend shows should I not ante up each year for “membership.”)  For the CIO, I’m not sure how best to play this out.  I think some special treatment might be the ability to participate in business experiments that are associated with the R&D activities, but there may be other quid pro quos for those who pony up to the R&D fund.

Comments?  Questions?

So, what do you think?  How “fantastic” is my IT funding fantasy?  Are any of you doing anything like this?  How is it working?  Could it work?  Answers on a postcard, please!

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An IT PMO Glossary

Posted on April 6, 2009 by itorganization2017

glossary

I’ve been working with a couple of clients around PMO’s and the thorny space of Portfolio and Program Management.  Not coincidentally, this continues to prove to be an area of great leverage for organizations trying to drive up their business-IT maturity (and with that, increase the business value delivered through IT investments, assets and capabilities.)  It also continues to be among the most popular topics on which I blog.

Each client quickly found the need to get themselves aligned around the terminology, and asked me to create a simple Glossary that would help them differentiate and standardize on the various terms that are central to IT Portfolio Management.

To that end, I offer here a “starting point” for such a glossary.  Of course, in our industry, where terminology is used inconsistently, and where opinions about meanings tend to differ widely, I realize that this exercise is fraught with danger.  However, I offer this as an initial point of reference.  I’d be delighted to hear any major issues with my use of these terms, and suggestion for modification and for extension to this list.

An IT Portfolio Management Glossary of Terms

(Note:  * Source is Wikipedia)

Term

Definition

Comments
Project Management Project Management is the discipline of planning, organizing and managing resources to bring about the successful completion of specific project goals and objectives.* Project Management is typically focused on deliverables, budgets and timelines to meet specific objectives.
Project Management Office Project Management Office (PMO) is the department or group that defines and maintains the project management standards and processes within the organization. The PMO strives to standardize and introduce economies of repetition in the execution of projects. The PMO is the source of documentation, guidance and metrics on the practice of project management and execution.* Project Management Office models vary from organizational entities that define the process and standards for others to follow, to those that actually manage projects for the organization.  Considerations as to type of Project Management Office model will include organizational experience and maturity with project management, organizational goals in terms of consistency, commonality and control, and preferences for centralization versus decentralization.

PMO’s are sometimes responsible for Project, Program, and in some cases, Portfolio Management.  In such cases, the acronym may be extended to PPM or even PPPM.
Project  Manager Project Manager is a professional management role typically vested with the responsibility for the planning, execution, and closing of any project. Some organizations insist on certification (such as by the Project Management Institute) for IT professionals who will manage projects above a certain size or criticality.  Sometimes, Project Managers are physically grouped into a Project or Program Management Office (PMO); other times they are virtually networked into a Project or Program Management Community of Practice, and sometimes they are simply expected (or at least, encouraged) to follow the processes, standards and methods laid down by the PMO without being part of the PMO organization or community.
Program Management Program (or Programme) Management is the process of managing multiple interdependent projects that lead towards an improvement in an organization’s performance.* Projects deliver outputs; programs create outcomes. A project might deliver a new factory, hospital or IT system. By combining these projects with other deliverables and changes, their programs might deliver increased income from a new product, shorter waiting lists at the hospital or reduced operating costs due to improved technology.  Program management is concerned with doing the right projects, whereas project management is about doing projects right. Successful projects deliver on time, to budget and to specification. An organization should select the group of programs that most take it towards its strategic aims whilst remaining within its capacity to deliver the changes*

Many enterprise IT organizations tackle large, complex efforts that combine the delivery of software elements, new and changed business models, and overall changes to organizational structure and capabilities. Typically these efforts involve several parallel projects, and managers find that “traditional” project management approaches fall short for such undertakings. Consequently, many IT professionals are turning to the substantial body of experience, and the smaller body of documentation, that supports the discipline of program management. This discipline describes principles, strategies, and desirable results for managing large-scale efforts comprising parallel projects. (Source: IBM White Paper: Program Management – Different from Project Management)
Program Management Office A Program Management Office is the department or group that strives to standardize and introduce economies of repetition in the execution of projects and programs. The PMO is the source of documentation, guidance and metrics on the practice of project and program management and execution. The term PMO sometimes refers only to Project Management, other times to both Project and Program Management, and in some cases extends to Portfolio Management. .  In such cases, the acronym may be extended to PPM or even PPPM.
Program Manager A Program Manager is a professional management role typically vested with the responsibility of coordinating multiple interdependent projects that lead towards an improvement in an organization’s performance. Program Managers have ultimate responsibility for the organizational performance outcomes. Program Managers are highly qualified and experience Project Managers who have also mastered the disciplines associated with managing complex, inter-dependant groups of projects that collectively lead to improvements in an organization’s performance.  In addition to project management excellence, they are highly proficient in organizational change management, managing up as well as down through the organization.
IT Portfolio Management IT portfolio management is the application of systematic management to large classes of items managed by enterprise Information Technology (IT) capabilities. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). The promise of IT portfolio management is the quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios.* IT Portfolio Management is founded on Modern Portfolio Theory which proposes how rational investors will use diversification to optimize their portfolios.  When applied to IT, Portfolio Management proposes how the organization (assuming it is acting in a rational way towards its investments) uses diversification to optimize its IT investments.  In this case, optimization may include balancing:

  • Short term and long term investments.
  • Low risk, low return against high risk, potentially higher return initiatives.
  • Common and shared (i.e., IT infrastructure) against business unit specific investments.
  • Investments by major business process.
  • Creating new capability versus maintaining existing capability.
  • Investing in IT process and capabilities (i.e., improving the “business of IT”) versus investing in IT capability for the business.

IT portfolio management is the primary means to elevate IT decision making and investment prioritization to a business issue.  In this context, IT portfolio management includes a top down decision making framework, implying that:

  • Senior executives have debated, considered and reached consensus about their IT investment portfolio strategy.
  • This, in turn, implies that senior executives have considered and agreed to a business-IT strategy.
  • They have wrestled with the thorny questions about “level of optimization” of IT investments – whether this should be a business unit or function (implying a conglomerate or holding company model) or the enterprise (implying a more integrated business model.
  • If they balance by business process, that the major business processes have been defined, and their importance to business strategy execution determined.
  • * They are able to monitor the gaps between their actual IT investments by portfolio category, against their target, or “model” portfolio, and can make adjustments as necessary.
Portfolio Management Office See Program Management Office IT Portfolio Management Offices are rare.  Rather, Portfolio Management is seen as a responsibility of business-IT governance, and the highest levels of business-IT investment decision-making.  As such, disciplines and groups such as PMO’s (or PPMO’s) are invaluable tools in support of effective IT Portfolio Management.

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IT’s Toxic Assets and Self-Funded Stimulus Plan

Posted on March 26, 2009 by itorganization2017

ist2_3042772-toxic-wasteOK – so I’m climbing on the latest news headlines – forgive me, but I do see an analogy that is important for IT leaders to be aware of.  Current business conditions mean this is a great time for CIO’s to clean up their back yards, and aggressively “kick the IT legacy problem in the teeth” as one of my Scottish clients used to say.  Also, it’s Spring, and a great time to do some Spring Cleaning of the house of IT.

What Are IT Toxic Assets?

I’m using the term to cover any IT asset or capability that is a net drain on value – i.e., the net cost of keeping it is greater than the business value it delivers.  Toxic IT assets can include:

  1. Hardware (computers, servers, printers, storage, routers, power supply equipment, etc.)
  2. Software (applications, tools, system software, etc.)
  3. People (anyone on the IT budget)
  4. Policies

Toxic Hardware

Let’s take hardware first.  We tend to get lazy when it comes to replacing hardware that is no longer delivering enough value to cover its cost.  Old Fred in accounting likes using the ancient fax machine because he’s never bothered to learn how to use the neat new scanner that sits right next to the fax.  So, rather than fight with Fred, we leave the behemoth machine there, taking up space, consuming electricity and giving off heat the equivalent of a small town, and needing non-standard and expensive paper roll supplies.  Or the old PC’s that nobody is using, or is ever going to use, but that sit around gathering dust because… well because it’s easy to let them sit there.

Just like in our private lives, we accumulate “stuff” and don’t clear it out until we move (perhaps not even then!)  Or until some exceptional event is upon us that motivates the clear out.  And, boy does it feel good when we’ve finished!  And so does the Salvation Army or whatever needy cause you’ve donated the stuff to!

Toxic Software

Software is a similar problem.  First, there’s licences and maintenance fees we are paying for stuff that is not being used.  There’s excess fees we are paying for “premium services” or “extended editions” that aren’t needed.  We put the full MS Office Suite on every PC, whether it is needed or not.  Second, there’s the legacy stuff who’s functionality was replaced long ago by an ERP or whatever, but that still has one or two users of an old report.  Those users could get a virtually identical report using the ERP’s report writer or query tool, but they can’t be bothered to learn it.

Toxic People

Then there’s the people.  Dr. Judy Bardwick, occasional research associate of mine, and noted author, speaker, and management consultant specializing in the psychology of the corporate environment, has written and talked extensively about the “entitlement culture,” and IT is by no means immune to this.  IT professionals sometimes tend to attach themselves to specific systems, feeding and taking care of them.  There’s always tweaks to be made, and end users are always asking for enhancements.  Some of these tweaks and enhancements are essential, but from my experience, many are “nice to haves” rather than “must haves” and nobody is really figuring out the full life cycle costs and value to determine if they are really cost-justified.  I guess that may be OK when times are flush (though I don’t really believe it’s responsible use of resources) but under the current economic climate, it borders on criminal behavior!

Toxic Policies

A classic example of a toxic policy is the “unfunded mandate” from headquarters.

In an effort to streamline accounting, all divisions and functions must align to the new Corporate Chart of Accounts.  Please see the policy document CP10478xPP04921z dated February 1, 2009, and please bring your accounting codes into compliance by June 1, 2009.

To the person in accounting who came up with the policy, it makes all the sense in the world, and will save their department a quarter headcount.  To the IT organization, who is being hit with unfunded mandates such as this from different corporate folk every week of the year, they add significant headcount, and/or detract from higher value generating activities.

Other toxic policies include too liberal a provisioning of personal computing devices (people getting devices that don’t need them, or getting way more device than they need).

So, What’s a Poor CIO To Do?

Rule 1 – be ruthless!  Don’t be a victim!  Take control!  Use the economic climate as air cover to do some serious toxic asset remediation.  One strategy I’ve seen work well is to pick a target – say 15% of the total asset base, for example – to eliminate over a 6 month period.  Enlist your business partners in the effort – it can be a good way to create some goodwill in those key relationships.

Rule 2 – leverage business-IT governance to ensure you really do have the air cover you need to make the changes.

Rule 3 – create motivation among the IT organization to help find and eliminate the toxic assets.  Create a competition, with some kind of reward (need not be financial) and recognition for (a) finding target opportunities, and (b) eliminating these opportunities.

Rule 4 – this is a great opportunity to experiment with Social Networking – to make the targeting and elimination of toxic IT assets a collaborative exercise!

(Image courtesy of Investorshub)

Filed under: Business-IT Governance, IT Management, Web 2.0, social networking | Tagged: , , , , , , | Leave a Comment »

The Dangers of Cloudy Thinking!

Posted on March 24, 2009 by itorganization2017

clouds-getting-laseredI’m fascinated and bemused by this Cloud Computing phenomenon.  Never before have I had such a strong feeling that something really, really important is happening – a fundamental discontinuity, if you will, in the way we leverage IT – and yet most of my clients and those I am interacting with in a couple of multi-company research projects are essentially standing on the sidelines.

I’m reminded of the earliest days of the personal computer, when IT executives I was working with at the time scoffed at the notion of PC’s (or microcomputers as we called them back then) as anything more than home entertainment, while a little ways down the corridor from their office, business executives were “Visicalcing” away at their Apple II’s and TRS80’s!

I’m not claiming that Cloud Computing is fully ready for prime time, and that any CIO who is not leading a wholesale transformation of his computing approach is irresponsible.  But  I am seeing way more denial than is healthy or appropriate, and the level of understanding and pace of experimentation is, I fear, going to put many CIO’s further behind the 8-ball that they should be.

Why Cloud Computing Denial?

I think there’s a couple of things going on here.

  1. The vendor market, once again, by jumping on the marketing buzzword of the month, is causing confusion and leading to skepticism.  There was a great story this week about the highly respected Jim Goodnight, CEO of SAS, thinking he was having a joke at the expense of the world’s tech media when his company announced a $70 million cloud computing initiative.  It turns out SAS was really announcing a new server farm, but Goognight thought it would sound more appealing if the press release used the term “cloud computing”.
  2. People inevitably try to understand new technologies based on what they already know, so Cloud Computing is seen as “warmed over1960’s time sharing.”   Actually, what mystifies me here is, what was so wrong with or bad about 1960’s time sharing?  It opened the door to end user computing, fourth generation languages and report writers and business analytics.  It made computing accessible and affordable to many who could not otherwise have experienced and benefited from computing.
  3. There’s the control issue.  This gets disguised as the need to protect information and ensure availability, but I believe has more to do with an innate need to own and manage large, hairy data centers and server farms as a badge of courage.

So, What Really Is Cloud Computing?

One of the more helpful descriptions comes from CEO of OpSource, Treb Ryan’s presentation at this year’s SaaS Summit.  Treb argues that the three defining characteristics of Cloud Computing are:

  • Complete flexibility.  Not just pay-as-you-go but automated sign-up, rapid provisioning and no commitments – it’s as easy to turn off as it is to turn on.
  • Web programmability.  The ability to access and manage functionality through Web APIs are a crucial element of a true cloud platform.
  • Community resources.  Successful clouds encourage communities that share ideas, best practices and add-ons to enhance their use of the platform.

These characteristics may be a little self-serving for OpSource, but do get to the essence of Cloud Computing and help differentiate it from earlier, more limited ways of sharing compute capacity.

Time to Denigrate or Time to Experiment?

I do believe that there are untapped “edge” opportunities that yield significant business value, and can be deployed rapidly and easily, especially important under these uncertain economic conditions and constrained IT budgets.  These edge  opportunities typically lend themselves to Cloud Computing as a basis for computing and storage capacity, and to Software as a Service as a basis for solutions provisioning.

CIO’s that see these new computing approaches simply as warmed-over history, may be doomed to repeat it!  CIO’s that see through the marketing hype, and have the vision to appreciate the fundamental changes that are upon us, have a unique opportunity to steal an early march, and while their competitors are hunkering down, help their companies steal market share and innovate.

(Image courtesy of Dvice.)

Filed under: IT Infrastructure, IT Management, Web 2.0 | Tagged: , | 1 Comment »

Clouds, SaaS and the Wal-Martification of Health Care IT

Posted on March 19, 2009 by itorganization2017

philips_tabletOver the years, a lot of my consulting work has been in pharmaceutical and medical devices industries.  That experience has been augmented over the last few months through my work with a major integrated health care, biomedical research, and medical education institution.  Through these experiences I have become fascinated with the potential for IT to help revolutionize health care in the US.

As a result, I have been closely monitoring this space, and was intrigued by Wal-Mart’s announcement of its plans to market a digital health records system.  For  the uninitiated, companies such as Microsoft and Google, plus a host of other players have offerings (or intentions) in this space, and President Obama’s stimulus package offers $17 billion for incentive payments over five years for doctors and hospitals to adopt EHRs.

Medical Records in the Cloud

As my readers will already know, I’m a proponent of contemporary Web 2.0 means of delivering IT capability – at least for certain situations, and it’s interesting to note that Wal-Mart’s plans are based on both Software-as-a-Service (SaaS) and Cloud Computing underpinnings.

With my interest in IT enablement of health care, among the blogs I track is one penned by John D. Halamka, MD, MS.  John’s many roles include CIO of CareGroup Health System and Harvard Medical School, as well as being a practicing Emergency Physician.  He has just posted on the Wal-Mart entry into this market, with some interesting commentary on the cost structure and Wal-Mart’s qualifications for this business.  His net take is generally a “thumbs up.”

I’m not sufficiently expert to try to predict how all this will work out, and there’s been ongoing heated debate about the cost and value of Electronic Medical Records.  However, I’ve seen enough of the health care industry, both as a consultant, and as a consumer, to know without a shadow of doubt that it has hitherto been woefully under-served by IT.  I strongly believe that while there will be twists and turns and glitches along the way, IT has the potential to take out significant costs, and improve the quality and outcomes of healthcare.   With healthcare taking such a huge bite out of ever decreasing retirement savings, it’s hard to think of many things with higher priority.

(Image is a Phillips Wireless Medical Tablet PC)

Filed under: IT Management, Web 2.0 | Tagged: , , , | 1 Comment »

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